Working Paper No. 1255

Does Job Security Hamper Employment Prospects?

Published: December 6, 2018Pages: 35Keywords: Employment protection; Active labor market programs; Unemployment JEL-codes: J60; J64; K31; H80

Does Job Security Hamper Employment Prospects? Carl Magnus Bjuggren and Per Skedinger


We investigate the effect of employment protection legislation (EPL) on the propensity to hire workers from unemployment and active labor market programs (ALMPs), utilizing a reform that decreased dismissal costs for small firms only. Using administrative data from Sweden, we find that less stringent EPL increased the share of workers hired from unemployment and some ALMPs. Our results suggest that there was less screening of new hires after the reform, and that liberalization of EPL mitigates the stigma associated with unemployment and participation in ALMPs.

 

Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective

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Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

About the book

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